Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I had a house in the Bay Area, ca that I was getting a 10% return on. That's almost impossible to get unless you leverage. I owned it free and clear. But in two years it doubled in value. I was still getting my 10% for what I put into it, but on paper I was now only getting 5%.
I sold it and 1031 exchanged it into other properties that I could get 13% on.
Doubled in value and now you are only getting 5%!? Geez, when it doubles in value again you could go broke! LOL
Is that net profit or gross profit in relation to purchase price? I'm curious because I want to compare conditions here in S. FL to the Bay area.
Here's some typical SFBay area and Honolulu numbers going back 40-50 years.
Rent to Price ratio .8%. Rent growth 6%+ compounded. Appreciation 9%+ compounded.
I found a unit under $200k with a 3.7% cap rate. A high rise in a resort community. High barrier to entry as to replicate unit is about 2-2.5x current price.
Appreciation looks good.....................hahahaha. Will buy as a 2nd home.
I found a unit under $200k with a 3.7% cap rate. A high rise in a resort community. High barrier to entry as to replicate unit is about 2-2.5x current price.
Appreciation looks good.....................hahahaha. Will buy as a 2nd home.
How are the association fees? And what will they look like when you want to sell?
i am living off my portfolio too without working . that is how we retire . drawing an income is a function of total return , not yield .
someone can draw the same income whether their portfolio spins of no yield and is all appreciation or whether all yield like a jumk bond fund .
you are mixing up a withdrawal rate with only a yield component .
in real estate you can't sell off your living room even though the property may have appreciated too so your income is just the rent component . the liquidity of stocks enables you to match total return to your income draw and tap both parts . my portolio does not care how the total return i spend is arrived at .
as long as the total return exceeds what i need to stay solvent there is no problem .
With rental RE you wouldn't need liquidity because you're collecting rent every month.
With a 100% success rate on my draw it is highly unlikely. In fact it has never happened in any 30 year period to date including if you retired in to the great depression. That is why we ball park around safe withdrawal rates .
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by honobob
Doubled in value and now you are only getting 5%!? Geez, when it doubles in value again you could go broke! LOL
Yup, nothing like crazy Ca appreciation, It has gone up since I sold it almost 2 years ago, but not like it did the first 2 years, Of course getting a great deal on a short sale when I bought it was the big factor.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by griffon652
Is that net profit or gross profit in relation to purchase price? I'm curious because I want to compare conditions here in S. FL to the Bay area.
And here I thought I was the only one that paid attention to that ratio. Besides a few posters on here who's ratio is irrelevant; that ratio usually says a lot about the quality of posts by a member.
Okay so I bought it for $135K on a short sale. Put about 25k cleaning it up and rehabbing some. So I am in for about $160K
Net rent per year after taxes, ins, and expenses were a tad under $16K.
Sold it for $345K after 2 years and 1031 exchanged into 6 single family houses in the midwest.
Gross rents on those came to about $76,800K a year. I keep about $45K of that
When the Ca house was worth $160K I got 10% return (16k/160K)
When it became worth $345K (16k/345K) the return was about 4.6%
When it became $345K in the midwest with 6 houses (45k/345K) the return was about 13%
Hope that helps
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Besides a few posters on here who's ratio is irrelevant; that ratio usually says a lot about the quality of posts by a member.
